The Federal Board of Revenue (FBR) has decided that the parametric audit selection of taxpayers would be done under new Audit Policy 2016 for picking cases for audit with ample legal backing to avoid litigation in courts. Sources told Business Recorder here on Wednesday that the tax authorities took decisions on the new Audit Policy 2016 during the last meeting of the Board-in-Council held at the FBR House.
During the meeting FBR Member Taxpayer Audit (TPA) made a detailed presentation on the draft Audit Policy 2016. The FBR members were informed that in the one of previous years ie tax year 2011, parametric audit selection was carried out by the FBR. However, for tax years 2012, 2013 and 2014, random audit selection was made. Litigation history for parametric and random audit selection was also discussed and decisions given by the courts were shared with the FBR members.
The FBR Chairman emphasised that audit policy 2016 may be based upon work best practices and should not suffer from any legal deficiency so as to give rise to any unnecessary litigation. The Member (PTA) also highlighted various parameters and the exclusions which are needed to be considered before audit policy 2016 is finalised.
After thorough deliberation and input from all the FBR members, it was unanimously decided by the Board-in-Council that parametric audit selection be carried out for the year under consideration. The tax authorities further directed all FBR members to give their input regarding the parameters for selecting cases for audit to the member (TPA) so that the audit policy 2016 could be finalised at the earliest.